Who would have thought that the IRS would turn out to be my best creditor?

Crazy, right?

They gave me a 120 day extention on the $990 I owe from 2005 and instructions on how to set up an installment plan for my back 2006 deposits. Sweet.

I’m very relieved right now. Not that I really should be, as I have alot of stuff going down the next few weeks, but just know the IRS won’t be seizing my bank accounts at least until July is a big relief.

Why would that be bad? Let me count thy ways:

1. If the IRS froze my bank account (not sure if they can do that, but my dad says they can), my growing income from my business might come to a halt
2. You don’t want to mess with the government
3. I met a IRS tax attorney this weekend at church….yikes!

So, I have until June 29th, 2007 to pay the $986 I owe from Q4 of 2005. That helps…now I just need to get my 2006 941 stuff figured out.

A general update

My father came to visit me this past week to look at my craphole of a situation and give me some fatherly advice (I have not, nor do I intend to ask him for $). It was nice to have his help, but he doesn’t share my optimism on the situation.

He basically thinks I am screwed and need to buy an hour with a bankrupcy lawyer.

I don’t want to go that route.

One thing he did suggest was checking out a DMP (debt management plan) for handling the creditors. I had thought that maybe I could just do everything myself, but I am getting behind on too many things, and this could be a good route. Anyone have thoughts on this? I’m assuming they do not do business debts, is this true?

Even if they only did my personal debt, between my 25K wells line, my 15K citifinancial personal loan, and few misc credit cards we are talking around 50K right there.

And if they could deal with my mortages…that would be awesome.

The House

So, I haven’t made payments on my mortgage for 2 months now….nothing for Jan or Feb on my first or second. In speaking with my first mortgage company they indicated I could “skip” two payments (feb and march), if I can pay january come the beginning of March. We will see…its going to be tight.

All my cash at the moment has been going towards Payroll for the business, my lease for the office, and bare minimum payment to SOME creditors. Only SOME.

The Bussiness - Some Good News

The good news is my business is booming now that I can focus 100% (well, minus the creditor distraction) of my thoughts and time on it. If only I had done this a year ago instead of trade away 150K….live and learn, right? Just hope I can keep living!

So, we are up to over 150 of our advertising packages sold, so this is my current montly income: $9,000/mo

BUT,

Current Expenses (newly calculated to include some advertising costs I’m incurring with the new growth in the business) are at: $12,500/mo

Yikes. So, I’m still short….but the gap is closing….I think I can maybe….just maybe close it this month. But then I have a TON of catch up work to do for my advertising clients who pay a montly fee…

Thoughts

I discussed the idea of doing a short sale on my house. I would have about a 15K prepay on the first, plus say another 10K in closing costs….BUT, my mortage payment right now is totally 4K a month. If there is anyway to get rid of that, I could make it for sure…well, not for sure. But I would have a better shot.

I have also thought about living at my office (we have an extra room that is just basically storage, and I could easily put a small twin mattress in there and sleep quite well), and renting out my entire house. This would be a net $700-$800 difference. I could then get $800 more a month from my house (to $2300/mo). So, that is an option.

I wish I could keep my house…but it is looking more and more like that there is no way. The problem is that my 2nd is at nearly 14% interest and its a 150K 2nd. That is huge. So, I’m paying $1500 a month, and that is all interest. Thought, advice here, anyone?

My Health

As for me….I’m holding up. There have been some rough days as of late. Some days I just want to give up, or not come into the office. But so far, I haven’t and I won’t. I’m often very exausted, more so than I should be, and I think this has to do my mind just never being able to rest.

I have started seeing a counselor. This was not my idea, (my paren’ts insistance) but now that I have gone twice, I think it will be a good thing. It’s going to be hard dealing with some of the issues that caused me to make such poor decisions, but I think I am ready to face them.

Thanks

I just wanted to say thanks to everyone who has given me helpful comments the past month or so. I really appreciate it. This is just a place for me to keep track of this giant mess I am in, but if I can get some good advice or support from it, that is great as well. Keep the comments comin’

I'm 300K in debt. Gulp. I'm 24 and day traded away a fortune. Now I'm trying to crawl back to zero. Why not subscribe to my RSS feed and join me on this journey. You can also subscribe via e-mail. I appreciate tips and feedback! ~ DebtKid

Whew. It’s been awhile.

Not sure why I haven’t felt like writing lately, but I have a few theories:

• When I don’t write about what I am dealing with, it makes it seem almost like it doesn’t exist, thus I think about it less.
• I have been pretty busy (but I could have written)

So, I would probably vote that the first reason is why I have not been writing much lately. Every time I thought about it, it kind of gave me a bad feeling, so I just need to force myself through it.

Since my last post, of the debt side of things:

• I worked out repayment on my last citibusiness credit card. Payment is going to be around $112 a month.
• I talked with my 1st mortgage company and can “skip” two payments, Feb. and March. If I can pay January on March 1st. Good news. Then they just roll those two missed payments into future payments over a certain period of time.
• No deals on the 2nd mortgage side of things…just been kind of avoiding them…
• My current “bad debt” monthly payment (not all is “bad”, as $4,152 is my mortgage): $7,406
• My current monthly business expenses: $3,300

Total Cash Needed Monthly: $10,706

Yikes.

Income

Luckily, my advertising packages at work have been selling well. I haven’t been selling as often as I would like, but we are now up to 107 packages. I think the program will max out around 225-250. I will have to spend around 2K a month in expenses on that program once it reaches that point.

Monthy Rental Income: $1,500

Current Monthy Business Revenue: $6,200

Total Current Monthly Income: $7,700

Amount Short: $3,006

Bummer. Once I hit 200 for our advertising program, we will have enough cash to cover basic expenses. Bear in mind though, the above budget does not include my personal expenses for food, clothes, ect. It does cover my insurance, car payment, and some gas though in the business budget.

I’m really probably around 5K short.

I’m spending around 1K a month right now on our advertising program, and that is not anywhere in the above numbers, so business expenses are really about 1K higher.

So, am I going to make it. I keep trying to tell myself I will, but I just don’t know. I know I can get us to 200 packages a month, which will generate 10K a month on the business side. Net of 8K though, add my 1500 and I’m still short or barely brakeven. Also, If I cannot generate enough business for our advertising client’s business…they will cancel their monthy payment, and then I am screwed.

I think that is the biggest thing I need to avoid, once I hit 200. Making sure people stay in the program by giving them great results…I just hope I can do it. I’ve got another month maybe to really get some results before I see mass cancellations…

On my personal side…I’m all over the place. I’ve talked with 1 of my brothers (I have 2) about the situation, and I am due to talk to the other one some time today. It sucked. Takes alot out of me.

It’s also almost valentines day which just makes me think of how I cannot date anyone at the moment, or anytime seriously in the near future…also kinda depressing.